HMRC Let Property Campaign Prompt Letters: Required Steps After Unreported Rent
HMRC Let Property Campaign Prompt Letters: What to Do After a Rental Income Nudge
If HMRC has sent you a letter about undeclared rental income, the required steps are to identify what type of letter it actually is, avoid signing any enclosed Certificate of Tax Position until you are certain of your position, work out what you actually owe, and notify HMRC through the Let Property Campaign within a reasonable time of receiving it. Ignoring the letter is the one response guaranteed to make things worse.
These letters, often called nudge letters or one to many letters, are not a formal tax investigation and carry no legal force of their own. But they are also not something you can safely put in a drawer. HMRC only sends them where it already holds data suggesting a discrepancy, and how you respond in the next few weeks affects both the penalty you eventually pay and whether this stays a straightforward disclosure or turns into something more serious.
What kind of letter have you actually received?
HMRC's rental income nudge letters are generated from data matching, typically Land Registry ownership records, letting agent reporting, tenancy deposit scheme data, and increasingly information reported directly by short-let platforms. The letter tells you that HMRC believes you have rental income that may not match what you have declared, and it usually gives you a limited window, commonly around 30 days, to review your position and respond.
Most of these letters include a document called a Certificate of Tax Position, a short form asking you to confirm which of a small number of statements applies to you: that your tax affairs are already fully up to date, that you have declared some but not all of your rental income, or that you have not declared any of it. There is no statutory requirement to complete this certificate, and it does not appear as a formal compliance obligation in HMRC's own factsheet on compliance checks, which instead describes a certificate of this kind being used later, once a formal check is already under way, to confirm all relevant facts have been disclosed.
Why the certificate deserves more caution than most people give it
This is the part of the letter that causes the most damage when it is handled carelessly. Signing a Certificate of Tax Position stating that your affairs are fully up to date, when they are not, converts what began as an informal nudge into a document HMRC can later point to as evidence of a deliberate false statement, regardless of how innocent the original oversight was. In our experience at Atlas Tax Advisors, the landlords who end up facing the toughest questions are rarely the ones who simply forgot to declare a spare room let years ago. They are the ones who signed the certificate too quickly, under the impression that ticking the "fully up to date" box would make the letter go away.
If you are not certain your tax affairs are complete and accurate for every year the letter could plausibly cover, do not sign a certificate stating that they are. Taking the time to check properly, even if that means missing the suggested 30-day window on the certificate itself, is a materially safer position than guessing.
Interactive Explainer for HMRC Let Property Campaign Prompt Letters
Created by Atlas Tax Advisors, this interactive visual guide helps UK residential landlords navigate an HMRC "nudge" letter concerning undeclared rental income and take the correct, penalty-mitigating steps. By exploring the interactive diagnostic tabs, assessment timelines, and risk breakdowns, you will discover whether your correspondence is a routine compliance letter or a formal enquiry, why signing the enclosed Certificate of Tax Position without a full review can carry severe legal risks, and how to safely disclose liabilities via the Let Property Campaign. Simply click through the numbered roadmap and penalty sliders to assess your position, calculate key submission deadlines, and work out exactly what records you need to prepare before making formal contact with HMRC.
Does receiving the letter change how any disclosure will be penalised?
Yes, and this is worth understanding before you decide how to respond, even though the full penalty mechanics sit outside this article. Once HMRC has made specific contact suggesting an inaccuracy, any disclosure you subsequently make is treated as prompted rather than unprompted under the penalty framework in Schedule 24 of the Finance Act 2007, which raises the minimum penalty available at every level of seriousness compared with coming forward entirely unprompted. Receiving a general nudge letter does not remove your ability to use the Let Property Campaign, but it does mean the clock on the more favourable unprompted terms has already run out for the income the letter concerns.
Is this a Let Property Campaign letter, or something more serious?
Check the letter for two specific things before doing anything else. If it mentions Code of Practice 9, the Contractual Disclosure Facility, or HMRC's Fraud Investigation Service by name, you are not dealing with a routine nudge letter at all, but with a civil fraud investigation procedure that carries its own strict 60-day response window and a materially different set of consequences, covered in full in a separate article on the Let Property Campaign versus Code of Practice 9. A standard rental income nudge letter, by contrast, will typically come from a general compliance or "customer compliance" team, invite you to review your position, and point you towards the Let Property Campaign rather than naming a formal fraud procedure.
The three response options, and what each one actually commits you to
HMRC's landlord letters typically present three options to choose from, and it is worth being precise about what selecting each one actually means in practice rather than which one feels least uncomfortable to tick.
Option on the letter | What it means | What happens next |
Tax affairs are already fully up to date | You are confirming, in writing, that every year of rental income has been correctly declared | If this later proves untrue, the signed statement itself becomes evidence against you; only select this if you have genuinely checked |
Some rental income has been declared, but not all | You are acknowledging a partial gap | You need to work out exactly which years and how much, then notify HMRC through the Let Property Campaign |
No rental income has been declared at all | You are acknowledging the position HMRC's data already suggests | You need to establish how far back the liability runs, then notify HMRC through the Let Property Campaign |
Worked example. A contractor in Milton Keynes who let a second property while working away from home receives a nudge letter referencing tenancy deposit scheme data. He initially assumes the letter must be a mistake, since he believed his accountant had included the rental income in his returns, and is tempted to tick the first option. A quick check of the last three years' Self Assessment returns shows the rental figure was in fact omitted for two of those years, due to a change of accountant partway through. Ticking the first option would have created a false certificate on top of the original error. Selecting the second option instead, and preparing a Let Property Campaign disclosure for the two affected years, keeps the position honest and limits the exposure to what has actually gone wrong.
What happens if you ignore the letter
Nothing happens immediately, and that is precisely the risk. A nudge letter carries no legal power to compel a response, unlike a formal information notice issued during a compliance check. But HMRC does not send these letters speculatively. If nothing is heard back within a reasonable period, the realistic next step is that HMRC opens a formal compliance check or enquiry using the data it already holds, at which point the more favourable Let Property Campaign terms are generally no longer available for that income, since any disclosure at that stage is prompted by an active check rather than a voluntary response to a general letter.
Interactive Explainer for HMRC Let Property Campaign Nudge Letters
This interactive guide explains what an HMRC Let Property Campaign prompt (or “nudge”) letter means for UK landlords with possible undeclared rental income, and sets out the practical steps you should take next. It covers how to identify the type of letter you have received, why the enclosed Certificate of Tax Position needs careful handling, the three main response options and their consequences, the required sequence of actions, and a useful checklist. Simply use the tabs at the top to move between sections, expand the key facts for more detail, and tick off the action checklist as you progress. The widget has been created by Atlas Tax Advisors to help you respond calmly and accurately.
Required steps, in order
Read the letter fully before responding to anything, checking specifically whether it names Code of Practice 9 or the Contractual Disclosure Facility, since this changes the entire process you are in.
Do not sign any enclosed Certificate of Tax Position until you have actually checked your position, even if this means missing the letter's suggested response date.
Pull together your rental income records for at least the last 4 years, and further back if you suspect the position may involve careless or deliberate non-disclosure, since the assessment time limits extend to 6 years for carelessness and 20 years for deliberate behaviour.
Establish which years, if any, were actually correctly declared, rather than assuming either that everything was fine or that everything was missed.
Select the response option on the letter that genuinely matches what you have found, and notify HMRC through the Let Property Campaign if any gap exists.
Submit your full disclosure and pay, or agree a payment plan, within 90 days of notifying HMRC, which is the fixed deadline once notification has been made.
What to do now
Locate the letter and identify exactly which compliance team sent it, since the letterhead and any case reference are the fastest way to establish what kind of process you are in.
Set your own realistic timeline against the 30-day suggested response window, treating it as a prompt to act quickly rather than a deadline you must meet at the expense of accuracy.
Gather bank statements, tenancy agreements, and any letting agent statements for the years in question, since this is the evidence any disclosure or certificate response will need to rest on.
Respond to the letter with the option that matches your actual findings, and begin a Let Property Campaign notification promptly if a gap exists.
Keep a copy of everything you send back to HMRC, including the completed certificate if you choose to submit one, since this becomes part of the record of how the matter was handled.
When this is worth professional help
A letter you can confidently answer within a day or two, because your own quick check confirms everything really has been declared correctly, does not need anyone else's involvement. It becomes worth professional help the moment you are not certain, because the difference between selecting the wrong option on a nudge letter and getting professional eyes on the position first is often the difference between a straightforward Let Property Campaign disclosure and a much longer, more adversarial process. A professional's real value at this stage is less about explaining what the letter says, and more about correctly identifying which years genuinely need disclosing before anything is put in writing to HMRC, since a certificate or disclosure that later needs correcting is judged far more harshly than getting it right the first time.
FAQs
Do I have to respond to an HMRC nudge letter about rental income?
There is no statutory requirement to respond to a nudge letter itself, and no legal requirement to complete an enclosed Certificate of Tax Position. However, ignoring it removes your ability to come forward voluntarily before HMRC opens a formal compliance check, which generally results in a worse outcome.
Should I sign the Certificate of Tax Position that came with my letter?
Only if you have genuinely checked and are confident your tax affairs are complete and accurate for every year the letter could plausibly cover. Signing a certificate stating your affairs are up to date when they are not turns an honest gap into a false statement HMRC can later rely on.
How long do I have to respond to an HMRC rental income letter?
These letters typically suggest a response within around 30 days, though this is an operational practice rather than a fixed statutory deadline in the way the 60-day Code of Practice 9 window is. Taking longer to check your position properly is safer than responding inaccurately within the suggested timeframe.
Does getting a nudge letter mean HMRC has definitely found something wrong?
Not necessarily. These letters are generated from data matching against sources such as tenancy deposit scheme records or Land Registry data, which can sometimes be incomplete or misleading, for example where a deposit figure implies a higher rent than was actually charged. It is still worth checking your position properly rather than assuming the letter is wrong.
What is the difference between a nudge letter and a Code of Practice 9 letter?
A nudge letter is a general prompt inviting you to review your position and does not carry legal force on its own. A Code of Practice 9 letter is a formal offer of the Contractual Disclosure Facility, used where HMRC already suspects deliberate fraud, and carries a strict 60-day response window with materially different consequences.
Can I still use the Let Property Campaign after receiving a nudge letter?
Generally yes, provided the letter is a standard nudge letter rather than a Code of Practice 9 offer. However, any disclosure made after HMRC has contacted you is treated as prompted rather than unprompted, which affects the penalty range that applies.
What if the letter is wrong and I have actually declared everything correctly?
Respond confirming your position, ideally with a brief explanation of why you believe your affairs are up to date, rather than ignoring the letter simply because you believe it does not apply to you.
What happens if I ignore the letter completely?
HMRC does not send these letters speculatively, and the realistic consequence of not responding is that HMRC opens a formal compliance check or enquiry using the data already held, at which point any subsequent disclosure is treated as prompted by that check rather than as a voluntary response.
Can HMRC see rental income from an Airbnb or similar platform, not just traditional tenancies? Yes. HMRC's data sources for these letters increasingly include information reported directly by digital letting platforms, alongside traditional sources such as Land Registry records and tenancy deposit scheme data.
Disclaimer
The article content is checked against primary sources, including GOV.UK and HMRC guidance and manuals, and is reviewed at least annually. Worked examples and figures are illustrative and are included to show how the rules apply in principle. They are not a calculation of your own liability.
Tax is highly fact-sensitive. Small differences in circumstances, timing, residence, or structure can change the outcome significantly, and the rules themselves change frequently. This article is therefore general information and is not advice for your situation. You should not act, or refrain from acting, on the basis of this article alone. Atlas Tax Advisors accepts no liability for any loss arising from reliance on it without taking advice. For your specific situation, please contact us or any professional accountant.
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